This step includes the requirements for participation in the Accelerated Regulatory Incubation Program (ARIP), which has been made mandatory for crypto asset service providers (VASP). In this way, Nigeria aims to secure the cryptocurrency market and ensure its healthy development.

According to the notice published on the SEC’s website, to participate in the ARIP program, VASPs must be a company established in Nigeria and maintain a physical office. In this way, Nigeria’s regulatory authorities will be able to monitor the activities of VASPs more closely and identify potential risks more easily.

At the same time, the CEO or General Manager of companies participating in the ARIP program must reside in Nigeria. This is considered an important step in terms of ensuring local representation and acting quickly in solving problems.

Organizations that can apply are companies that are engaged in investment and securities businesses and have already applied for registration with the SEC regarding digital assets or whose application is in the evaluation phase. This requirement contributes to the stability of the market by ensuring that experienced and reliable players in the sector are included in the ARIP program.

In its circular dated June 21, the Nigerian SEC instructed all existing and potential VASPs, including crypto brokers and traders, to complete their applications through the SEC ePortal within 30 days. In this way, it is aimed to register all players in the cryptocurrency market and subject them to the supervision of regulatory authorities.

At a time when the rules regarding the issuance of digital assets, platform offerings, exchange and custody are not yet clear, the ARIP program offers a temporary solution to VASPs. Thanks to ARIP, the SEC aims to accelerate the registration process and allow VASPs to operate until the digital asset rules come into full force.

The regulatory framework to be implemented will cover all virtual asset service providers and token issuers doing business in Nigeria or providing services to Nigerian consumers. This scope also includes platforms that facilitate the supply, trade, exchange, storage and transfer of digital assets.

Strict rules are applied during the application process to ensure transparency and trust. Applicants are required to submit a sworn statement that they have not been convicted of fraud or dishonesty, a comprehensive operational plan, a business model that provides a clear value proposition, and documentation detailing investor protection measures. While the processing fee is set at 2 million naira (about $1,277), applicants must also submit proof of required shareholder funds.

The Nigerian SEC requires companies participating in the ARIP program to report regularly. In this context, it is mandatory to submit weekly and monthly trading statistics, quarterly financial statements, compliance reports and incident reports to the SEC. Thanks to this strict supervision, regulatory authorities will be able to closely follow developments in the market and respond quickly to potential problems.

It was stated that VASPs that do not comply with the terms of the ARIP program may face serious sanctions. It was stated that the penalties start with 5 million naira (approximately $3,194) and will increase by 200,000 naira (approximately $127.76) per day for ongoing violations.